AFX: Euronext, NYSE still want tie-up with Deutsche Boerse, Borsa Italiana

15 October 2006

Euronext and NYSE Group Inc said they still want talks with both Deutsche Boerse AG and Borsa Italiana over a possible tie-up in cash equity market operations. Euronext and NYSE have already agreed to merge, but German market operator Deutsche Boerse Friday notified the European Commission of its intention to acquire Euronext in an alternative deal.

In a joint statement in reaction to the news, the Euronext and NYSE said they still believe a merger of cash businesses in Europe on the basis of the federal model initiated by Euronext, which Deutsche Bank opposes, 'delivers the maximum benefits... with minimum execution risk.'

'Euronext and NYSE re-confirm their willingness to begin immediately discussions with Deutsche Boerse and Borsa Italiana to create such a consolidated European cash market,' the statement concluded.

Earlier this month a study by Henri Lachmann, Schneider Electric supervisory board chairman on European stock market consolidation called on Deutsche Boerse to merge its equities operations into Euronext.

In return, the German markets operator would receive a 15-20 pct stake in Euronext. The study was written for Paris Europlace, a lobbying group of major French companies. Under his proposal, Euronext would first acquire Deutsche Boerse's share trading business then as a second stage merge with NYSE.

Existing offers for Euronext are 'unsatisfactory', Lachmann said in the study. Euronext has repeatedly said, however, it wants a tie-up with Deutsche Boerse and Borsa Italiana only as part of its agreed merger with NYSE.

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